BT needs to be open about Openreach aims
When it comes to Openreach, the arm of BT that runs the UK's cables, fibre and network infrastructure, the telecoms giant is hovering outside the door of the last chance saloon.
On the eve of a pivotal decision on the future of Openreach, MPs on the culture and media select committee have upped the ante on both BT and regulator Ofcom with a hard-hitting new report that accuses the telecoms firm of “significantly under-investing” in its infrastructure arm.
Openreach, routinely and predictably criticised by BT's rivals for poor service, has been the subject of scrutiny from Ofcom for some time. So far, the regulator has stopped short of demanding the network infrastructure firm be spun off from its parent. Instead it has opted for talks with BT about how it can make Openreach more independent. It is expected to give a progress update on these talks “shortly”.
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One of the biggest questions to answer is how Openreach can provide British households and firms with the service they need.
An estimated 10 per cent of the UK still lives in so-called broadband “not-spots”, where households lack basic broadband speeds of around 24 megabits per second. This is despite Government targets to reduce the gap to just five per cent by the end of 2017.
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To its credit, BT has announced improvements in the time it takes customers to get an appointment for an Openreach engineer and the company says it invested more than £1bn a year in infrastructure – at a time when the UK was emerging from recession.
But it looks like more change is coming: Ofcom has introduced minimum standards for Openreach's quality of service, getting tougher each year, and it intends to extend these further. The regulator has to weigh the benefits of a full separation from BT against the impact of reforms already made, and potential disruption to the public and business. That makes it hard to gauge how far it will go.
The government also has a part to play in solving this telecoms muddle, with its eagerly awaited but as yet unseen digital strategy.
A lot rests on upcoming decisions. Not only is the future of BT at stake, but that of the entire digital economy.
For the sake of broadband users across swathes of the country, both BT and ministers need to get cracking, and to get it right.